Kenya: Diaspora remittances reach record
Remittances from the Kenyan diaspora reached a record $ 641.5 million in the first three months of the year, reflecting in part the impact of growth in investment products targeting the diaspora.
Indeed, according to data from the Central Bank of Kenya (CBK), for the period January-March, inflows represent a jump of 48.29% over the 432.6 million dollars recorded in the same period last year.
In the details, remittances from the diaspora reached new records in four consecutive months with $ 203.8 million in December, $ 208.9 million in January, $ 210.4 million in February and 222 $ 2 million in March.
“The improvement in performance reflects an increase in the adoption of financial products by the diaspora and new partnerships between commercial banks and international money transfer providers,” says CBK in the weekly market note. These figures show that Kenyans abroad surpassed tea exports and tourism receipts to become the main contributor to the country’s currencies three years ago.
Financial services companies, especially commercial banks, have developed savings and investment products in recent years, such as mortgage loans to the diaspora, which have always favored real estate.
Moreover, notes the bank, thanks to these inflows of funds, the diaspora community of the country has become a major economic player especially in the construction sector, despite the high transaction costs of nearly 10 percent of the value transferred. It is also important to note that remittances played a very important role in strengthening the shilling in 2018, as they are the source of foreign exchange and cumulatively contributed more than 2% of Kenya’s real GDP (gross domestic product ) in 2017.